This story is a familiar one if you have been active in the markets for a few decades. It starts with the WSJ reporting on Jim Simons’s decision to step down as Chairman of his firm, Renaissance Technologies.
As the Wall Street Journal so kindly points out in this morning’s article, Renaissance Technologies public funds had a real ugly year in 2020. They were down 20-30%. Simons is one of the most successful hedge fund managers on Wall Street—ever! Nothing like a parting gut-punch from the most widely read financial newspaper in the U.S after an otherwise brilliant career. Classy move!
Also in the WSJ this morning is an article about twenty-something traders active in the Reddit WallStreetBets forum (today’s version of the ragingbull.com message board) scoring big wins in shares of Gamestop. One trader boasts about doubling his money in about a week of owning the position. His outlook for the shares: “I think it’ll just keep marching higher because there’s such a high short interest.”
So we have Wall Street veterans losing money in this market and twenty-something day traders boasting about massive windfalls from intelligence gleaned from internet message boards.
This is a truly frightening set up for students of financial market history.
